History of CRM Software

by

CRM Market Analyst, Software Advice

1980s: Evolution of Database Marketing

Direct Marketing, a practice pioneered by Lester Wunderman, evolves to Database Marketing. Database marketing put more emphasis on statistical techniques for understanding customer behavior. This data was then used to create personalized communications with potential customers. Robert D. "Bob" and Kate Kestnbaum are often viewed as the trailblazers of this practice. Suggested by: Neil Woodcock.

1986: First Contact Management Software

Pat Sullivan and Mike Muhney found Conductor Software. They release first product ACT! in 1987, which is recognized as the pioneering contact management application. Goldmine and others followed suit with their own releases.

Late 1980s: Introduction of Client/Server Architecture

Client/server architecture is introduced, spurred by the wide adoption of PCs. This provides end users with far more computing power on their desks and creates an opportunity for thousands of new software companies. The earliest front-office vendors have their roots in PC-based contact management software during this era.

Early 1990s: Contact Management Becomes Sales Force Automation

Contact management evolves into sales force automation (SFA), and early innovators such as Saratoga Systems and Brock Systems make their debut. These systems automated standard processes for sales professionals to promote efficiency in tracking their leads, opportunities and deals. 

 

 

1993: Siebel Systems Enters the Market

Tom Siebel forms Siebel Systems, which will become the dominant SFA player in short order. Earlier in his career, Siebel headed Oracle's direct marketing division and created a program to streamline the sales process. He tried to convince Oracle CEO Larry Ellison to package the internal application for sale. Ellison does not see the opportunity.

1995: Term "Customer Relationship Management" Coined

The term "customer relationship management" (CRM) wins out as the most popular term for front-office applications. Most industry insiders credit Gartner with coining the term, but others will point to Tom Siebel, IBM or John Anton. Several terms including CIS (customer information system) and CIM (customer information management) float around for several years, but CRM wins out.

1997: ERP Vendors Expand to Front Office

Oracle enters the CRM market with the roll-out of Oracle Sales and Marketing (OSM). Meanwhile, ERP vendor Baan acquires customer relationship management software provider Aurum. It becomes clear that the major ERP vendors are setting their sites on the front office.

1998: SAP Enters Market to Rival Larger Vendors

SAP seriously enters the CRM market by establishing SAP Labs as a unique research and development organization which would focus solely on emerging application categories like CRM. It becomes clear that the real battle for CRM leadership will come down to Siebel and the large ERP vendors.

1998: CRM Expands Beyond Point Solutions to a Broader Suite

Siebel acquires Scopus, adding leading call center technologies to Siebel's traditional strength in sales automation solutions. While viewed as an aggressive undertaking, the deal made clear that competition in the CRM market was moving beyond point solutions to a broader suite of sales, service and marketing applications.

 

1999: Acquisitions Lead to Consolidation of the Market

PeopleSoft acquires Vantive, a historically strong player in the customer support market. Vantive had raced to build out SFA and compete with Siebel, but was was unable to keep pace. Rumors of a PeopleSoft/Vantive combination swirled for years; PeopleSoft ultimately bought Vantive on the cheap after the target's financial results had slowed significantly.

1999: e-CRM Vendors Provide Stiff Competition

Emerging "e-CRM" systems like e.piphany, Broadbase and Kana gain momentum and the appreciation of Wall Street investors. These systems rode the wave of the ill-fated dot-com bubble as Siebel and other legacy software vendors raced to adapt to new Internet era technologies.

 

1999: CRM Goes Mobile

Siebel releases Siebel Sales Handheld, one of the first mobile CRM applications. The following year, other major vendors such as Oracle and SAP released mobile applications. While these early mobile applications were limited in functionality, today's smart phones deliver almost 100% of the CRM feature set.

 

 

1999: Salesforce Enters Market as First Major SaaS Vendor

Salesforce.com enters the scene as the first major player in the Software-as-a-Service (SaaS) CRM space. Originally, Salesforce is viewed as a "toy" for smaller businesses. However, the system evolves to add functionality and scalability, eventually threatening to disrupt industry leaders such as Siebel Systems.

 

2001: Burst of the Dot-Com Bubble

Dot-com bubble bursts and the CRM market retracts. Oracle experiences a loss in license revenues of over 25%. Even industry titan Siebel Systems is impacted, posting its first quarterly decline in revenue. e-CRM players fall the hardest as enterprises halt spending on "dot com" technologies.

 

2001: Sage Enters Market and Expands Through Acquisitions

Sage enters the CRM market with the acquisition of Interact Commerce, Inc. Sage goes on to acquire SalesLogix, expanding its CRM offering to become a leading vendor in the SMB segment. The majority of the company's growth is the result of acquisitions.

 

2001: Greenberg's "CRM at the Speed of Light"

In February, Paul Greenberg releases “CRM at the Speed of Light”. The book, now in its 4th edition, introduced the idea of ‘xRM,' which expands traditional CRM to encompass the management of all relationships, both internal and external, for-profit and non-profit, and government and municipalities. Suggested by: Leon Tribe

2002: Integration With Legacy Systems Becomes a Selling Point

Microsoft enters the CRM market with the release of Dynamics CRM. The product is fairly limited at first, but touts strong integration to Microsoft Outlook as a primary benefit. The product evolves to make Microsoft a strong contender in the CRM market.

 

2006: Siebel Wiped Out In String of Oracle Acquisition

Oracle acquires Siebel after years of dueling for CRM leadership. Siebel had fallen on tough times and founder Tom Siebel had turned over the reigns to new leadership. With little light at the end of the tunnel, Siebel agrees to become the next addition to Oracle's pile of acquired enterprise applications.

2007: Launch of Force.com

Salesforce.com launches Force.com, a cloud-based application development environment. The platform enables Salesforce to build an ecosystem of SaaS partners, address gaps in its product line and counter the notion that cloud-based systems are not customizable. Suggested by: Marshall Lager

2008: Switch in Focus From Transaction to Interaction

Comcast kicks off @ComcastCares, one of the first examples of a large company using a social network to interact with customers. This strategic Tweeting garnered positive feedback and significant media attention. Other corporate giants followed suit and social CRM was validated.

2009: New Technology Expands Customer Service Capabilities

Web self-service becomes a top priority for SaaS vendors. The traditionally high cost of customer service, combined with long waiting times in queues drive this development. RightNow acquires HighLive, a customer community platform vendor. Oracle announces their integration of InQuira's web self-service applications with Oracle CRM OnDemand. Salesforce.com adds a knowledge management and customer Q&A feature to their Service Cloud.

Future: Trends to Watch in CRM

Social CRM and the future of the industry. Where will the CRM industry go next? With the introduction of concepts such as Customer Enterprise 2.0, Sales 2.0 and Social CRM, we can anticipate an increased focus from vendors on how to incorporate these new technologies into a CRM strategy. Currently, many vendors have 2.0 or social functions, but they have yet to figure out a way to integrate these concepts in such a way as to realize their full potential. Also, with new technology comes new blood. We expect to see a good amount of smaller vendors enter the space in an attempt to capitalize on this new technology, similar to what we saw in the early years of SaaS.

Thumbnail image created by Moyan Brenn.

 
  • SailorrThom

    Hi Ashley, I am giving you kudos and credit for this well organized timeline. I have a college report on CRM history to do and your work here provides an excellent reference. ^_^

    • http://softwareadvice.com/ Ashley Verrill

      Awesome, thanks for the kind words!

  • Besfort Ahmeti

    Hi Ashley,

    Thumbs up for a beautifully presented timeline of CRM.
    However, I am having a hard time finding sources to back up the fact that the term “Customer Relationship Management” was first coined by Gartner (my main focus), Tom Siebel, or John Anton.

    Can you please help me with that. Finding sources for Gartner would do just fine. (:

  • Besfort Ahmeti

    Hi Ashley,

    Thumbs up for a beautifully presented timeline of CRM.
    However, I am having a hard time finding sources to back up the fact that the term “Customer Relationship Management” was first coined by Gartner (my main focus), Tom Siebel, or John Anton.

    Can you please help me with that. Finding sources for Gartner would do just fine. (:

  • http://www.noortech.biz Moamar Aldram

    Very valuable information and elegant layout simplify the understanding of this crucial technology. Hats up for you Ashley.

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